Preparing to Buy a Home: True Cost of Home Ownership
Calculation of repairs in an income-producing property -
In yielding assets, there are various expenses, there are current expenses,
It is known that if time changes and increases (insurance, property management according to rent, municipal taxes…),
But there are expenses / inequalities that happen once in a while, which are difficult to estimate
Exactly, but they do exist and come to us from time to time, so an appropriate emergency fund is needed for them.
Since we usually invest with financing, it's important for us to be conservative in calculations,
To ensure a positive monthly flow from your investment.
Some investors calculate these expenses by rule of thumb, I'd rather be more accurate
And try to assess the merits of a property.
What are the factors that will affect the height of the repairs?
1. Property Yearbook
2. Renovated property or not
3. Quality of renovation
4. The physical state of the apartment building,
Will affect committee payments even if the investor's apartment is renovated
5. Quality of property construction
6. The size of the property
7. The quality of the target audience of renters
8. Short term or long term renters
9. Exposure to weather / area hazards with natural disaster risk
10. Make sure the property owner renovates immediately, and avoid the need for a major overhaul
11. The difference between the cost of repairs and working hours between the states and city to city
12. Private home or apartment (here only the repairs inside the apartment are at the owner's expense)
13. The efficiency of the management company
14. The technical specifications of the property
As you can see, there are many factors that affect the cost of repairs in rental assets,
Those with experience in the field make it easier for them to estimate expected repairs, but even those who are inexperienced,
It is important to be mindful of this in order to prepare for investment.
A wonderful weekend for everyone, and most importantly without the balm!
Preparing to Buy a Home: True Cost of Home Ownership
Home ownership entails more costs than just mortgage interest, property taxes, and property insurance. Budgeting for the actual cost of owning a house can make your experience more positive.
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It seems to me that you have Excel ready for this issue for posting data and if there is a request to receive it…
Thanks Ronnie!
Give an example:
You have purchased a property for $ 1
two options:
1. Renovate at 20,000 and sell immediately at 135,000
2. Do not renovate and sell at 115,000
In both cases 15,000 gains but in the other case less work
Of course the goal is to renovate and sell more than 135,000 if the market allows a quick sale at 150,000 or more what good…
When not renovating an apartment
It is easier to sell it to another active investor
That leaves him with an open element of entrepreneurship with the possibility that he will also benefit
right. For example, we only care for and manage apartments that have been renovated. This guarantees a contractor warranty for two years, also on various products, such as electrical products, faucets etc. This lowers our preoccupation with the apartment to a minimum, the costs to the landlord as well, and leaves the property owner with more disposable income. I am in favor of renovation, especially in old properties that intend to hold for a long time between three and five years minimum. It is indeed a large drop expense, which saves a "leak" of small money each month, the possibility of demanding a slightly higher rent, and without a headache.
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A thorough post with emphasis on the nuances
I'll just add the dilemma
Will renovate the property immediately after its purchase and hold it long term as a rental property
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Do not renovate before the first rental and sell it at the first opportunity that the market allows capital gain
How true